Panel Oks $12 Billion Farm Cuts

September 11, 1985|By Christopher Drew, Chicago Tribune.

WASHINGTON — The House Agriculture Committee approved $11.8 billion in budget cuts Tuesday and sent a new five-year farm bill to the floor. But administration officials said most of the cuts were spurious and insisted that the bill remained far over budget guidelines.

During the debate, the committee narrowly rejected, for the second time, a Democratic attempt to let farmers decide whether they would accept mandatory production controls as a way to increase crop prices and farm income. The committee instead voted 22-18 to hold a farmers` referendum on a controversial proposal for a new type of voluntary cutback program that would subsidize grain exports at lower prices than domestic sales.

Committee Chairman E. ``Kika`` de la Garza (D., Tex.) called the bill ``a victory of sorts`` for the sharply divided committee. ``We couldn`t agree on the extremes, so we ended up somewhere in the middle,`` he said.

De la Garza said the bill met the committee`s spending limit of $34.8 billion over the next three years. This represents a cut of nearly $12 billion from current levels.

Agriculture Department lobbyist John Ford, however, asserted that the cuts were achieved with ``smoke and mirrors`` using outdated economic assumptions, and actually amounted to only $2.5 billion to $3 billion.

Ford also said the administration strongly opposed the referendum on the new cutback program, proposed by Rep. Berkley Bedell (D., Ia.), and expected to defeat it when the bill reached the House floor.

De la Garza said floor debate could begin by late next week. The Senate Agriculture Committee still has not finished the commodity-program portion of its version of the bill.

The House committee achieved $3.3 billion in savings simply by extending to Oct. 1 the annual deadline for the government to make income-deficiency payments to farmers. Since the government`s fiscal year ends Sept. 30, that pushes each year`s payments into the next fiscal year and cuts outlays over the next three years.

The committee also voted to speed a planned shift from direct government loans to farmers to greater use of less costly loan guarantees. In addition, it voted for lower ceilings on disaster-relief programs and made minor cost-cutting changes in export-credit programs.

Rep. Edward Madigan (R., Ill.) fought a proposal to give Agriculture Secretary John Block the option to cut price supports for soybeans 10 percent. He got the committee to agree instead to give Block authority for a 5 percent cut if needed to revive soybean exports.

The proposal for the new cutback program, aimed at protecting farmers from the worst agricultural slump since the Great Depression, would have to win support from at least 60 percent of the nation`s wheat and corn growers.

If the proposal failed, the committee bill would give Block the option of gradually cutting price supports according to a prescribed formula or testing another new concept that would require farmers to sell surplus goods rather than putting them in government storage.